Throne speech pledges fiscal overhaul

By Karen Kleiss, Edmonton JournalEDMONTON - Alberta’s Conservative government on Tuesday pledged sweeping changes to the way the province manages its money, trumpeting plans for a radical change in the budgeting process and a major review of provincial income and spending. In the throne speech read Tuesday by Lt.-Gov. Donald Ethell, the government said Alberta’s current fiscal framework relies too heavily on volatile energy revenue as a source of income. “It’s time for foundational change,” Ethell said. “It won’t be easy, but it is the right way to better manage the annual unpredictability in the budgeting process.” The speech said the new “results-based” budget review process will require an examination of all spending and a review of saving, spending and revenue, including income taxes. The government will examine “its entire fiscal framework to ensure it spends Albertans’ tax dollars appropriately,” Ethell said. “This will include reviews of the Alberta Heritage Savings Trust and Sustainability Funds, capital and infrastructure projects, gaming revenue, our operating budget and income taxes, along with reviews of existing programs.” Premier Alison Redford said taxation is likely to be an election issue and that it is part of the policy conversation Albertans need to have. “The most important thing for me is that in our budgeting process we have continued to rely on that sort of volatility yearly …,” Redford said. “We’re going to make sure that we have a sustainable funding for those programs that matter to Albertans.” Asked whether she was opening the door to potentially raising taxes, Redford said: “I’m saying that we’re going to review the whole fiscal framework and I’m quite open to that discussion. I have no pre-supposition as to what that will be or whether that will even be part of the conversation.” Wildrose Leader Danielle Smith seized on the comments as evidence the government plans to raise taxes. “After months of speculation about how the PCs are going to raise our taxes, we now have a pretty clear road map – income taxes are going up,” Smith said. “It was very clear in the throne speech that they are going to be looking at ways of increasing revenue and we think that’s the wrong way of tackling the problem of deficits. We think the way that you tackle the problem of deficits is you control your spending. We believe that Albertans are taxed enough.” Liberal Leader Raj Sherman contrasted the government’s “vague” revenue strategy with the platform his party released Monday, which called for tax increases on corporations and people who earn more than $100,000 a year. “We’ve made our plans with respect to taxation absolutely clear,” Sherman said. “Fair taxation to get predictable revenue streams, so we can actually make stable, predictable decisions.” The speech contained a long list of additional promises, from family care clinics to a Canadian energy strategy, as well as additional support for seniors, post-secondary education and property rights. NDP Leader Brian Mason said the government had failed to address the needs of families. “I’m very surprised there was nothing on Assured Income for the Severely Handicapped,” Mason said, referring to Redford’s promise to raise those payments $400 a month. “I’m very surprised that they’re not addressing the skyrocketing electricity bills. There’s nothing in here really to solve the problems with our seniors and the lack of long-term care beds….If Albertans are looking for answers from this government, they did not get them in this throne speech.” Bill Moore-Kilgannon of Public Interest Alberta, a non-profit organization focused on education and advocacy, said “there is nothing in the speech that will give vulnerable Albertans any comfort. “There is a crisis in long-term care for seniors, they haven’t even mentioned the word long-term care. There is no mention of a poverty reduction strategy, no mention of AISH.” Richard Truscott of the Canadian Federation for Independent Business said he is disappointed the government did not make the province’s business environment a priority. “There was no mention of the red tape reform effort that is currently underway,” Truscott said. “It’s one thing to conduct a task force, but it is going require sustained pressure to make meaningful progress on reducing red tape.” David Eggen, executive director of Friends of Medicare and NDP candidate for Edmonton-Calder, noted the government made no mention of publicly delivered health care. “They always make a point of saying only publicly funded,” he said. “Everyone should be watching to see if they hand over public money to private contractors ….” Alberta Union of Provincial Employees president Guy Smith urged the government to use the results-based budgeting process to reconsider its decision to privatize services once provided by government. “The money the government is using to provide public services is being cut from the front lines and it’s going elsewhere,” Smith said. “There a huge cost to contracting out and privatization.”